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Tuesday, 30 May 2006
Page: 71


Ms ROXON (7:14 PM) —The Royal Commissions Amendment Bill 2006 can be summed up in four short words: too little too late. It is too little because it does nothing to address the key obstacle to Commissioner Terence Cole uncovering the whole truth about the ‘wheat for weapons’ scandal—that is, his restrictive terms of reference. It is too late because the little it does do really should have been done months ago. Labor recognised the problem in March, only to be scoffed at by the Attorney-General. If the Attorney had been doing his job he could have acted to deal with this issue three months ago, avoiding the expense and delay of the Federal Court case which told the government what Labor had told them for free—that we need action to stop the abuse of legal professional privilege to obstruct the inquiry.

Having recognised the problem in the first place, Labor of course supports the bill to remedy the problem. However, it should be clear to all members of this House that this bill is no solution to the real problem affecting Commissioner Cole—that is, his restricted terms of reference. This bill will make amendments to the Royal Commissions Act 1902 and the amendments will have effect for the current inquiry into the involvement of Australian companies in the UN oil for food program. That is why we are dealing with this legislation urgently.

But the bill will also have a more lasting effect for all commissions exercising powers under the act, and I want to use this opportunity to consider some of the implications of that. First, let me explain what this bill does and why it has the opposition’s support. It is a relatively straightforward bill that will provide a special procedure for commissions to determine the validity of claims for legal professional privilege over documents that a commission seeks. Legal professional privilege, as many in this House would know, is a common law rule of evidence that prevents courts from requiring the production of evidence that would disclose confidential communications between a lawyer and a client.

This is an important principle of justice, as clients should feel free to provide full instructions to their lawyer so that the lawyer can provide complete and accurate advice. This freedom is compromised if clients fear that their instructions could subsequently be used against them in court. However, legal professional privilege does not apply to all communications between a lawyer and their client. In order to attract the privilege, the communication must have been made either with the dominant purpose of obtaining legal advice or in relation to actual, pending or reasonably anticipated litigation. As a result, not every claim for legal professional privilege is a valid one. It concerns me that we may be seeing an increasing trend for some companies and some lawyers to make exaggerated claims for privilege or to conduct certain business affairs in the presence of lawyers simply to form the basis for a later claim for privilege. We have seen examples of this in the current AWB case and, to some extent, in the James Hardie case before that and in a number of other cases that have been in the media over the past few years.

The parliament needs to send a strong message that this is not on. To protect the privilege, we cannot allow it to be misused. Legal professional privilege is intended to be a safeguard in our system of justice, which relies on candour between lawyers and clients. But it is not meant to be a cloak to hide unlawful conduct. So this bill goes some way to sending the message that, by streamlining the process for assessing claims of privilege in the context of royal commissions, this can be achieved. This should be a disincentive to trumped up claims by ensuring that the onus to pursue privilege claims lies with the claimant, not with the commission.

The bill will provide that legal professional privilege remains a reasonable excuse for failing to provide a requested document to a commission only if either a court or a member of the commission has accepted that the document is privileged. However, under this bill a member of the commission would be empowered to demand by written notice the document for inspection. Inspection could be made either by the member or by a person authorised by the member—for example, some type of adviser. If the claim is accepted, the commission would be required to disregard the document for the purposes of any report or decision that the commission makes.

The bill also creates new penalties for failing to produce a document once a commissioner has rejected a claim for privilege or for failing to produce a document required for determination of a privilege claim. In both cases the penalty would be $1,000 or six months imprisonment, which is consistent with existing penalties for failures to produce documents. It would be a reasonable excuse for not providing the documents if a court had previously found that they were subject to legal professional privilege.

Why is this bill necessary? It is necessary because of issues that have already been discussed widely in the AWB case, and it is necessary expressly because of the Federal Court case involving the Cole commission—that of AWB Ltd and Cole. This case involves precisely the sort of exaggerated claim for privilege I have been talking about. AWB claimed privilege over the now infamous ‘draft statement of contrition’, which had been produced in December 2005. Commissioner Cole determined that privilege did not attach to the document and that there was no reasonable excuse for it to be withheld. AWB then applied to the Federal Court to order Commissioner Cole not to use the document. The Federal Court found that the document was not subject to privilege, on the rudimentary ground that it had not been produced and circulated for the dominant purpose of obtaining legal advice. In short, it was produced for the purposes of public relations advice, not legal advice.

The court also agreed with Commissioner Cole that the Royal Commissions Act empowers the commission to determine whether or not a document is subject to privilege. However, the court cast serious doubt over whether the commissioner also has the power to demand to inspect a document in order to make a determination on the claim of privilege. Ultimately, the court did not make a binding determination on this issue. But it did point out that, in principle, the privilege would prevent the commission from inspecting a document over which the privilege is claimed and that any abrogation of legal professional privilege to allow such inspection could only be made by ‘clear and unmistakable language’ in the Royal Commissions Act, not merely by implication.

So that is the vital change this bill makes, using the clear and unmistakable language referred to by the court. In providing a special process, it makes it crystal clear that a commissioner can demand to see a document in order to make his determination over whether it can be admitted into evidence. The fact is that determining whether or not a document meets the ‘dominant purpose’ test of legal professional privilege often requires the decision maker to see the document itself. This is not an uncommon process in the courts.

I note that the Law Council has raised some concerns about this process. It is worried that inspection of a document that is later held to be privileged could nonetheless ‘pollute the mind’ of the commissioner when he comes to write his report. This is a valid concern, and so some caution is sensible. It is also sensible to be concerned about the potential removal of this protection, when you consider the conduct of the Howard government in using very politicised commissions of inquiry on other matters. When forced to establish a commission into an area that could expose wrongdoing or incompetence by coalition members, the government have restricted the terms of reference to keep the inquiry away from sensitive areas. But they were quite open to using commissions of inquiry as witch-hunts to harass the labour movement, such as in the building industry royal commission or in the Centenary House inquiry. When the executive uses commissions of inquiry as partisan tools, I am very wary about granting them too many powers.

On the other hand, I am convinced that the bill comes with enough safeguards to protect against the particular problem the Law Council refers to. I want to touch on those protections. Firstly, the bill makes it clear that the commissioner must disregard the contents of a document for later decisions once it has decided that it is actually a privileged document. As I said, this is similar to the process used by judges in other courts. Secondly, the bill allows the commissioner to authorise a third party to inspect the document in order to advise the commission on whether or not a document is privileged. This option could be exercised where it is a sensitive issue and the commissioner is concerned about the live possibility that inspection of the document could compromise the inquiry. Again, that can be referred to an adviser or someone else—similar to the common process in which judges may refer claims of privilege to other judges for determination when matters are in their courts.

Finally, and most importantly, the bill makes no attempt to limit the claimant’s right to have the privilege determined once and for all by a court. The bill provides very clearly that privilege determined by a court is definitive on the issue and is a reasonable excuse for refusing to provide a document to a commission. Accordingly, if a party genuinely believes that a document is privileged and would compromise the inquiry, they may seek a court order to protect them. This erects a hurdle that exaggerated claims will rarely overcome, but it does not undermine those genuine claims that might be made.

So, on balance, I am convinced that the bill merely streamlines the process by putting the onus for commencing litigation on the claimant, not the commission. This should deter false and exaggerated claims as well as reduce the incidence of litigation during the life of the commission and the expense and delays that go with it. I want to emphasise that the bill does not in any way affect the substance of legal professional privilege or the protection it affords lawyer-client communications if it is properly claimed.

According to the government, Commissioner Cole has said he expects to need more documents that are subject to privilege claims, so the passage of this bill will have an immediate streamlining effect for the remainder of the commission’s life. If that is so, Labor is prepared to offer its support for the urgent passage of the bill—and that is why we are debating it tonight after it was introduced only last week. The bill is correct in policy so, if it is helpful to Commissioner Cole for it to be passed quickly, it ought to be passed quickly.

Having described what the bill does, I want to make it absolutely clear to the House what the bill does not do. The bill does not remove the obstacles to a full investigation by Commissioner Cole into the ‘wheat for weapons’ scandal. The bill does not address the restrictive terms of reference through which the government has restricted the inquiry. The bill does not demonstrate any serious commitment to a full, open and transparent inquiry into what really happened behind the Iraq kickbacks scandal and how deeply the government was embroiled. So, at this point, I move:

That all words after “That” be omitted with a view to substituting the following words:

“whilst not declining to give the bill a second reading, the House notes:

(1)   that the Opposition demanded action to prevent the abuse of legal professional privilege in the Inquiry into certain Australian companies in relation to the UN Oil-For-Food Program (the Cole Commission) in March;

(2)   that the Attorney-General arrogantly rejected that demand at the time and incompetently waited almost three months, after a Federal Court case, before taking action with this bill;

(3)   that, while this bill proposes a sensible, albeit late, change to the law, it will not solve the broader problem that the Cole Commission’s Terms of Reference are limited;

(4)   that the current Terms of Reference do not allow the Cole Commission to make findings on whether or not Ministers, their offices and departments have discharged their duties under Australian administrative law and under international law (in particular UN Security Council Resolution 661);

(5)   that the Cole Commission has provided written advice that a change to the current Terms of Reference which would allow the Cole Commission to make such determinations is a matter that would be ‘significantly different to the existing Terms of Reference’ and is therefore a matter for the executive; and

(6)   that if the Howard Government had nothing to hide in the $300 million ‘wheat for weapons’ scandal, it would expand the Cole Commission’s Terms of Reference to allow Commissioner Cole to make such determinations”.

Whether this bill passes or not, Australians can have no faith that the Cole royal commission will get to the whole truth of this shameful episode. The reason for that is that the government has imposed terms of reference that restrict the inquiry. These terms are blinkers designed to deprive the inquiry of its peripheral vision, where, if it focused its attention, it would discover coalition ministers everywhere—the Minister for Foreign Affairs, the Minister for Trade and even the Prime Minister himself—failing in their responsibility to protect the good name of Australia. The commission cannot inquire into whether the Australian government or its officers or ministers breached administrative law or international law. In other words, Commissioner Cole is not looking into whether government ministers turned a blind eye to, or were involved in, a systematic operation to undermine the Iraq sanctions regime. That is the question which should preoccupy this House. It is an issue which goes to the heart of the integrity and competence of this tired, old government.

Let us not forget what happened. An Australian company—not just any old company, but a company which was for some of the time Commonwealth owned and which to this day retains a Commonwealth-sanctioned monopoly on the export of wheat—paid over $300 million in kickbacks to the regime of Saddam Hussein. At the same time, Australia was party to the United Nations sanctions against Iraq and the Australian government was preparing for war against Iraq to remove its dictator. The bottom line is that, while the Australian government was asking our young men and women in the Navy to participate in a blockade against Iraq, AWB was undermining the efforts of those sailors by paying kickbacks to prop up the very same regime. What an insult to the sacrifices those sailors made! They were serving our country—many thousands of kilometres from home, many thousands of kilometres from loved ones—and trying to enforce sanctions.


Mr Farmer —Hardly! That’s speculation.


Ms ROXON —It is not speculation. They were there doing the job that your government sent them to do, and a major Australian company was simultaneously flouting those sanctions. As those sailors served us, money was being funnelled from the wheat exporter, right through their blockade, into the coffers of Saddam Hussein—money that would eventually be spent on weapons, potentially to be used against Australian soldiers.

What Australia really needs to know is what role our government played in this scandal. Was it just a case of sheer incompetence? That is the government’s best defence. Was it a failure to read the cables? Was it a failure to pick up the 29 warning signs or to take the necessary action? Or was it even a failure by the Minister for Foreign Affairs to follow up on his own requests for more information, which he had scribbled in the margin of one of the cables that he bothered to read? The government’s best argument for the behaviour of its ministers is that they were lazy, incompetent or just plain stupid. These are ministers with front-line responsibility for our national security and economic wellbeing, but they were too lazy to read the cables they were sent. Should we accept the ‘incompetence’ defence or was it even more sinister? Was it wilful blindness—the ‘don’t tell me, I don’t want to know’ excuse? Or was it more than that—a sideways nod, a wink-wink, nudge-nudge, she’ll be right signal to AWB? Or was there even direct knowledge and acquiescence?

In all scenarios, it is no exaggeration to say this is one of the most appalling scandals, if not the most appalling scandal, in the history of the Commonwealth. And yet we have an inquiry that is prevented from examining the most pressing and serious question of the affair: how did the Australian government betray Australian sailors and soldiers by letting money flow past their blockade and into the treasury of one of the world’s most ruthless tyrants? One thing we do know is that, whatever happened, the Howard government has been committed to covering up the scandal. That is not changed one iota by this bill. It is a sensible bill that makes a modest procedural change, but it does not go to the core mechanism of the cover-up: the restrictive terms of reference of the Cole inquiry.

Even this little change is not something that the government did willingly. It took the expense and delay of a Federal Court action to show them what action was needed. Labor gave the government the same advice for free. On 12 March the member for Griffith and I issued a statement calling on the government to take action to resolve the problem of AWB’s exaggerated claims for legal professional privilege, which threatened to stymie the work of the inquiry. Typical of his arrogance, the Attorney responded with a withering press release calling our demand for a solution to the legal professional privilege problem ‘misconceived’.

In this place we sometimes might overlook, if not forgive, arrogance when it is displayed by someone gifted with extraordinary ability, but that does not seem to apply in this case. This press release was an example of how the Attorney’s arrogance is in inverse proportion to his competence. The self-righteous, lecturing tone was a sure sign that he was about to stuff this up. In fact, the Attorney seems to have the temperament of a BASE-jumper—if he is going to take a fall, he will make it all the more spectacular by talking himself up to great heights beforehand.

Almost three months and an expensive Federal Court case later, the Attorney-General finally dealt with the problem that he had ridiculed Labor for recognising. In presenting this bill, he has had to face up to his own incompetence. This extreme sports approach to governance may give the Attorney-General an adrenalin rush, but it leaves the rest of Australia cold. We would prefer that he got it right in the first place, even if it does mean admitting that Labor occasionally has a good idea.

To make matters worse, today we have learnt more of the consequences of the Attorney-General’s failure to take action in March when Labor urged him to do so. We learnt that AWB is now applying to the Federal Court for a declaration that 1,240 extra documents sought by the inquiry and subject to privilege. This looks like being yet another delay and another expense in this increasingly drawn-out inquiry. We have to wonder what the point is of streamlining the process for assessing privilege claims when those claims have already escalated into litigation of this level.

If the Attorney had taken our advice in March rather than issued his silly press release, a streamlined process might have been in operation some time ago. Of course, this bill would not have prevented AWB from taking court action to assert their privilege over the documents, but it would have meant the question was addressed at least two months earlier and, potentially, through a simpler and less expensive process. Now we are faced with an utter mess: a dispute over the status of over 1,200 documents at a time when the commission of inquiry should be nearing its end. What is even more frustrating is that it is not the first example of Mr Ruddock’s unique blend of arrogance and incompetence, nor, it seems, should we expect it to be the last.

Just yesterday we saw another classic example, when the Australian Law Reform Commission carpeted the Attorney’s sedition laws, saying sedition ‘should be removed from the federal statute books’. This followed the Attorney’s heavy-handed manner last year when pushing the antiterrorism laws through parliament. He ignored Labor at that time, but he also ignored his own backbenchers and the recommendations of a Senate committee, who joined in our warnings that the sedition laws were a mistake. Only last week, Mr Ruddock was back in this place parading like a peacock about the chamber and attacking me and others on this side for opposing those laws on the basis that they only scared journalists and artists, not the purveyors of violent propaganda.

Then yesterday, again from the heights of hubris, came the fall. The study by the Law Reform Commission of the laws he had commissioned told him what the rest of us had been saying for six months: the sedition laws were a mistake. Mind you, the Attorney’s conceit was only amplified in the face of this extraordinary criticism. He pretended it was all part of a cunning plan. I am not sure, Mr Deputy Speaker McMullan, whether you listened to The World Today on ABC radio this morning, where, staggeringly, Mr Ruddock said:

This is no embarrassment to me. It was the result that I anticipated and expected.

You have to ask: why on earth did the Attorney ram through the sedition laws if he ‘anticipated and expected’ such stinging criticism from the Law Reform Commission? Why did he not simply accept the view of Labor, of his backbench, of the Senate committee and, now, of the ALRC that 14th century sedition laws designed to stifle criticism of the government are not the right vehicle to deal with the 21st century problems of terrorism and community violence? If that is the best spin he can put on this exposure of his ineptitude, then the Attorney’s career has truly descended, almost into the realms of some sort of tragicomedy.

We saw the same pattern on the bankruptcy anti-avoidance laws. Early in 2005, the Attorney opposed outright Labor’s plan to improve the clawback provisions against those high-flying bankrupts who hide their assets in the names of families and related entities. Early in 2006, the Attorney’s own plan included Labor’s suggestion that he had opposed 12 months before—again, the height of arrogance and the fall of incompetence. Now we are seeing something similar with the family relationship centres. The Attorney has been swanning about the country talking about these centres and plans a trip in July to open all of these new centres.


Ms George —Really?


Ms ROXON —Really. Managed properly, this could actually give him something to be proud of. Indeed, it would be sad for him—


Mr Baldwin —Mr Deputy Speaker, I rise on a point of order. The bill before the House is the Royal Commissions Amendment Bill 2006, not the family centres bill, nor does it concern the travel details of the Attorney-General. I ask you to draw the member back to the bill.


The DEPUTY SPEAKER (Mr McMullan)—I thank the Parliamentary Secretary to the Minister for Industry, Tourism and Resources. I have been listening to the rather wide-ranging address from the member for Gellibrand, but she has been making a point of continuity with regard to her attitude to the bill. I regard it as in order, if somewhat wide-ranging, and I will allow it to continue.


Ms ROXON —Thank you. Both you, Mr Deputy Speaker, and the parliamentary secretary might be assisted by the fact that the second reading amendment I have moved does indeed deal with the Attorney’s approach to a number of these issues. I am simply using it to highlight what is unfortunately a consistent pattern that we see running right through this bill, through his approach to bankruptcy, through his approach to sedition and now through his approach to the family relationship centres in a way that causes us on this side of the House some grave concerns.

I am particularly concerned with the family relationship centres because, if they are managed properly, this indeed will be something that the Attorney could and should be proud of. It would be sad for him to leave the parliament after such a long career if he were not able to say that this was one of his great achievements. But if it is mismanaged, as we think it has been along the way, despite warnings from Labor, like those warnings that were given on this royal commissions bill—and the government was too arrogant to accept any of our recommendations and advice—then we are going to see a system fail that could actually be a good one. So even this worthy plan could be undermined by his incompetence. At estimates we learnt that the contracts for many of these centres had not even been signed, only five weeks from opening day.


Mr Baldwin —Mr Deputy Speaker, I rise on a point of order. I have just had a look at the amendment moved to the royal commissions bill. There is no such provision in there for the wide-ranging debate—


The DEPUTY SPEAKER —I thank the parliamentary secretary. I do not consider that the amendment helps the member for Gellibrand in her debate either. Why I ruled her in order was not for that reason, although I accept that she raised it and you are entitled to raise a point of order. I do not consider that it helps the member for Gellibrand. The member for Gellibrand is in order because she has been making a connection in a pattern of behaviour that relates to this bill. But I do hope that she will make that pattern a bit clearer and promptly draw it back to the bill.


Ms ROXON —It is important to us because we are concerned that, on 13 March this year, when Labor put forward a proposal and called on the government to deal with the issue of legal professional privilege, as it was taxing the mind of Commissioner Cole at that time, the Attorney scoffed and sneered at us. But here we are, two months later, with the full backflip by the Attorney, finally taking action to address this issue of legal professional privilege. We have learnt not to take his arrogance seriously, because we know it is nothing more than a bravura performance to cover up his incompetence. But my concerns, and the concerns that should actually worry the parliamentary secretary, because I think he might be getting a family relationship centre in his area—


Mr Baldwin —No.


Ms ROXON —He is not? He must be one of the very unlucky nonfavourites of the Attorney in that case. I am not sure why you are defending him so strongly. Those of your colleagues who are getting a centre do not want to be standing up here and having us say, ‘We told you so months ago,’ in the same way that we are doing here with the bill, because we can see that problems are arising. The information that we got in Senate estimates this week showed that the centres are not able to set up properly, that they are being rushed to start. In poor old Townsville, where they have been hit by the effects of Cyclone Larry, they are being told that they have to open in a tent, if that is what it takes to be open by 1 July—


Mr Baldwin —Mr Deputy Speaker, I rise on a point of order. I have just had a reread through the amendment. I understand what you have said about a wide-ranging debate. But the member opposite has not referred back to the issues contained in her own amendments, which are in relation to the Cole inquiry, or indeed to the various aspects of that inquiry. Her whole speech seems to be about family relationship centres, which bear no resemblance at all to a royal commission, to a royal commission bill or to the Cole inquiry. I ask you to exercise your judgment and bring her back to the bill. If she has nothing further to say about the bill then perhaps she should sit down.


The DEPUTY SPEAKER —I thank the parliamentary secretary. I previously indicated that I do not consider the question of whether or not this part of the member for Gellibrand’s contribution is in order to be related to the amendment, which I agree with you does not help her in this matter. The member for Gellibrand has made the connection. It goes to what she is trying to establish as a pattern of behaviour that is reflected in this bill. It is not the longest bow I have heard drawn in this House. I will allow her to continue but I do ask her to continue, to refer to the bill.


Ms ROXON —We are concerned that before this House is a bill that is actually affecting a commission of inquiry that is under way now—in fact, due to report exactly a month from today. We want the commission to be able to complete its job and we want it to be able to do it quickly. We are happy to support the bill, because we think it is going to help the commission do its job, but we are still disappointed that we were not having this debate weeks or months ago, when the issue was first raised, which would have enabled the commission to do its job more quickly. We would also prefer to be here addressing a change that would actually go to the substantive problem that Commissioner Cole faces, which is the very restricted terms of reference that this government has given the commission.

We are pleased to be supporting the bill. We are happy to facilitate its urgent passage through the parliament, so that Commissioner Cole can continue his work with minimal further interruptions, but the government cannot be allowed to continue its ruse that this bill demonstrates its commitment to helping Commissioner Cole to find the truth. As we all know, the truth is that Commissioner Cole is hamstrung by restrictive terms of reference that prevent him looking at the question Australia needs to know the answer to: exactly what role did Howard government ministers play in this shameful betrayal of our sailors and soldiers who served our country in the Persian Gulf and in Iraq when these sanctions were in place?

Unfortunately, even with the modest change that is before the House, we will not get an answer to that question. And unfortunately, I fear, it will not be the last time I am in this House criticising the Attorney for failing to take any advice, either from the public—from those advocates who raised concerns with the approach he was taking—or from our side of this House, when we see mismanagement or incompetence or laws that could be improved or changed and the Attorney persisting with his standard behaviour, which is that he is the only person who can be right and he will not accept any sort of recommendation from anybody else. I do not want that to happen with this bill. I do not want it to happen with the family relationship centres, which could offer so much to the community. I do not want it to happen with every other debate that we have in this House. So I trust that the Attorney will by now have learnt that lesson. While supporting this bill, I hope that we do not have to be here again in the future to tidy up yet another one of his messes.


The DEPUTY SPEAKER —Is the amendment seconded?


Ms George —I second the amendment and reserve my right to speak.